This question is worth 10 marks in total. This is a written calculation question, and you should perform the necessary calculations/working on paper to later be scanned and uploaded. Start a new page for this question. For dollar amounts, give your answer to the nearest cent. For interest rates, give our answer as a percentage rounded to 2 decimal places. If any parts of the question use values from earlier parts, use the EXACT values from earlier parts. QUESTION START An investor buys 1 share of Zephyr Ltd at the price of $34.5 on July 1, 2021. The firm is not expected to pay any dividends. Consider the following three possible scenarios for the share price on July 1, 2022: $58 if the economy is "good", with a probability of 30%. $36 if the economy is "moderate", with a probability of 55%. $22.5 if the economy is "bad", with a probability of 15%. . a) Calculate the expected return for holding the share for a year. (2 marks) b) Calculate the variance of return and standard deviation of return. (2 marks) c) Explain the concept and benefits of portfolio diversification. Is it possible to diversify away all risk in a portfolio? Explain your answer. (2 marks) d) Suppose that shares in a different company Eagle Inc. can be bought on the market, with returns as follows 1% if the economy is "good", 4% if the economy is "moderate", and 5% if the economy is "bad". Explain how you could use Eagle Inc. shares in conjunction with shares in Zephyr Ltd. To create a diversified portfolio. You do NOT need to do any calculations here. (2 marks) e) Explain the difference between expected return and realised return. (2 marks) QUESTION END You will need to scan this question and upload it to iLearn via the Final Exam submission link. Please disregard the box below (or enter anything you want into it), it doesn't have any effect on your grade. This question is worth 10 marks in total. This is a written calculation question, and you should perform the necessary calculations/working on paper to later be scanned and uploaded. Start a new page for this question. For dollar amounts, give your answer to the nearest cent. For interest rates, give our answer as a percentage rounded to 2 decimal places. If any parts of the question use values from earlier parts, use the EXACT values from earlier parts. QUESTION START An investor buys 1 share of Zephyr Ltd at the price of $34.5 on July 1, 2021. The firm is not expected to pay any dividends. Consider the following three possible scenarios for the share price on July 1, 2022: $58 if the economy is "good", with a probability of 30%. $36 if the economy is "moderate", with a probability of 55%. $22.5 if the economy is "bad", with a probability of 15%. . a) Calculate the expected return for holding the share for a year. (2 marks) b) Calculate the variance of return and standard deviation of return. (2 marks) c) Explain the concept and benefits of portfolio diversification. Is it possible to diversify away all risk in a portfolio? Explain your answer. (2 marks) d) Suppose that shares in a different company Eagle Inc. can be bought on the market, with returns as follows 1% if the economy is "good", 4% if the economy is "moderate", and 5% if the economy is "bad". Explain how you could use Eagle Inc. shares in conjunction with shares in Zephyr Ltd. To create a diversified portfolio. You do NOT need to do any calculations here. (2 marks) e) Explain the difference between expected return and realised return. (2 marks) QUESTION END You will need to scan this question and upload it to iLearn via the Final Exam submission link. Please disregard the box below (or enter anything you want into it), it doesn't have any effect on your grade